View Full Version : Questions Regarding Volume/adx

07-07-2008, 02:43 AM
Hi, I Have 2 Questions For Everyone:

1. Is It Good To Use The Adx(directional Movement) Indicator In Order To Decide Whether Or Not I Should Enter, Exit , Or Take Partial Profit Out Of My Position?
I Mostly Use It As My Partial Profit Indicator. I Started Trading Only A Couple Of Months Ago So My Tape Reading Skills Aren't Good Enough Yet In Order To Base My Decisions For Exiting The Trade On Them And I Need Another Indicator. Is That A Decision Or Not?

2. Sometimes When I Wait For A Stock To Breakout/breakdown Is A Sudden Spike Of Volume On The Stock Before The Price Of The Stock Reaches My Entry Trigger. Could That Mean That The Stock Has A High Buyers/sellers Power That Will Try And Stop The Stock Of Making A Good/fast Move In My Direction And Eventually Ruin The Breakout? Or Is It Something Good?

07-08-2008, 03:17 AM
Hi - good questions... personally I use ADX only as the entry signal, for when it gets >40. For volume spikes, "it depends" as sometimes it's an exhaustion/pivot by the time you see it, other times it's a signal of a continuing breakout.. which is why tape reading is needed for identifying the buy/sell imbalance, along with price elasticity/range.

In general I am skeptical of any strong move continuing for longer than 20 minutes or so for an intraday stock breakout.